Trade License

Trade License

A trade license is a type of document that authorizes and permits you to engage in commercial business related activities. It doesn't grant land ownership or authority to engage in any action other than business activities. The municipality provides this license in collaboration with other offices such as healthcare, building, estate, and the state government.

Because of this, each company must get this license from the Licensing Division before initiating any manufacture, trade, or storage and overall business related activities. You have to fill out the form and submit it to the corporation's commissioner 30 days before the beginning of the business operation. The company must provide all required documentation when filing for this license.

Who Can Issue a Trade License?

The municipality corporation's licensing department and the state government in some cases grant the trading license in several areas such as manufacturing, construction, healthcare, and so on. The Indian government authorizes the license in order to stabilize the business activities around the country. Based on the location of the industry on records, it provides authority to conduct any trading or business. The issuance of the license varies by state, based on the rules and regulations of the local municipal authorities.

Categories of Trade License:

Food Business:

Any organization that handles food related business activities falls under the food industry. This will also include places that prepare and serve meals such as a hotel or a catering center. To function, the following firms will require trade licenses:

         ♦ Cafeterias, hotels, and eateries

         ♦ Shopping malls, movie theatres, and nightclubs

         ♦ Bakeries, confectioneries, and snacks stores

         ♦ Dairy shops, merchants, and any other establishments that provide food

Trade and Other Related Services Business:

Any trade or occupation that entails providing care to clients would also need to acquire a certain type of license. For the following trading activities, the firm requires a license. 

         ♦ Parlors and barbershops

         ♦ Computer shops

         ♦ Miniature production units

         ♦ Units of intermediate manufacturing

         ♦ Small-scale manufacturing

Manufacturing Industries:

 This license is also required for any type of industry that manufactures products of any kind. 

         ♦ Production industries with a moderate base

         ♦ Companies and huge manufacturing facilities

Categorization of Trade Licenses:

The trade licenses are split into the following three categories depending on the degree of risk associated with the company:

Low Risk-Based License

This type of license would apply to any industry or a company that does not pose a substantial risk. This license is usually considered by hotels and other types of eateries.

Medium Risk-Based License

This sort of license is typically provided to enterprises including small and medium-sized enterprises.

High Risk-Based License

This sort of license is typically awarded to businesses and large-scale enterprises. Typically, this type of institution would have a greater risk of working with various types of chemicals and toxins. Usually, the surveillance levels on these companies would be greater than on low/mid-level licenses.

Documents Required for Trade License:

♦ Address proof of the business

♦ ID proof of the applicant

♦ Aadhaar card

♦ PAN of the individual in case of proprietorship, else PAN of the firm or company

♦ Memorandum of Association (MOA) in case of Companies

♦ Certification of incorporating in case of Companies

♦ A latest municipal property tax receipt in case the premises are owned, else lease document or consent letter of the owner of the property where the business is registered.

♦ NOC of the neighbours (nearby property owners)

♦ Certified layout plan of the office


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